Beach Haven Co. purchases 30% of the stock of Ship Bottom, Inc.on January 1.2021. The book values of Ship Bottom's net assets are equal to tair value, except for the following assets, which have differences: Asset Inventory Equipment Land Customer Lists Book Value 80.000 22.000 250,000 Fair Value 83.000 12.000 290,000 15.000 Remaining Useful Life 100% sold during 2021 4 years 10 years At December 31.2022 (second year after purchasel. Beach Haven will make an adjustment on its books under the equity method, to record the amortization of fair value/book value differences That entry will include a O credit to Investment in Ship Bottom for $300. debit to Income from Ship Bottom for $600. credit to Investment in Ship Bottom for S600. credit to Income from Ship Bottom for $300. O000
Beach Haven Co. purchases 30% of the stock of Ship Bottom, Inc.on January 1.2021. The book values of Ship Bottom's net assets are equal to tair value, except for the following assets, which have differences: Asset Inventory Equipment Land Customer Lists Book Value 80.000 22.000 250,000 Fair Value 83.000 12.000 290,000 15.000 Remaining Useful Life 100% sold during 2021 4 years 10 years At December 31.2022 (second year after purchasel. Beach Haven will make an adjustment on its books under the equity method, to record the amortization of fair value/book value differences That entry will include a O credit to Investment in Ship Bottom for $300. debit to Income from Ship Bottom for $600. credit to Investment in Ship Bottom for S600. credit to Income from Ship Bottom for $300. O000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Beach Haven Co. purchases 30% of the stock of Ship Bottom, Inc. on January 1.2021. The book values of Ship Bottom's net assets are equal to tair value, except for the following
assets, which have differences:
Asset
Inventory
Equipment
Land
Customer Lists
Book Value
80.000
22.000
250,000
Fair Value
83.000
12.000
290,000
15.000
Remaining Useful Life
100% sold during 2021
4years
10 years
At December 31.2022 (second year after purchasel. Beach Haven will make an adjustment on its books under the equity method, to record the amortization of fair value/book
value differences. That entry will include a
O credit to Investment in Ship Bottom for $300.
debit to Income from Ship Bottom for $600.
credit to Investment in Ship Bottom for S600.
credit to Income from Ship Bottom for $300.
O000
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